Tear sheets are reports providing up-to-date information on stocks, traditionally sent by brokers to clients via courier or fax. Electronic tear sheets are now common, containing vital information about a company’s status and stocks, helping investors make decisions on buying or selling shares.
In the financial world, tear sheets are sheet reports that provide up-to-date information on the status of various types of stocks. In general, a cut sheet will refer to the page or sheet that is pulled from the Standard and Deficient Stock Report. The page is commonly called a tear sheet, as at some point the page or sheet would be torn from the report binding and sent by brokers to various clients.
The origin of the tear sheet predates modern methods of communicating with customers through electronic means. Before computers, it was not unusual for a broker to contact a client by phone regarding one or more public companies that received high ratings from Standard & Poor’s in the latest edition of stock reports. As a follow-up to the phone call, the broker often removed the company-related pages from the current issue. The broker would then forward the loose pages to the customer via a courier service or perhaps regular mail. In later years, the tear sheet could be faxed to the client. After reviewing the tear sheet or sheets, the client could advise the broker whether or not he should execute an order on the stock.
While traditional tear blade use is still common in some parts of the world, the use of electronic tear blades has increasingly become the standard. Today, it is possible to access an online database and produce a tear sheet containing all the vital information about a company’s current status and any stocks or bonds issued by the corporation. An electronic cut sheet can be saved in several different formats and easily emailed to a customer for inspection. Using an electronic cut sheet is especially helpful, as emailing the document is often faster than any courier service and will even be more efficient than faxing the physical cut sheet.
The data that is usually included in the tear sheet will provide the investor with the necessary information to make a decision about buying or selling shares related to a specific company. Along with the basic financial data on the corporation, there will be a projection of the company’s future performance, along with information on the current performance levels of the company’s stock. Reviewing the data and comparing the company’s projected performance to current market trends can help an investor determine what, if any, action is recommended in regards to buying or selling shares.
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